Australian (ASX) Stock Market Forum

2005 and Beyond:The BEAR is BACK?

Jump to new
Re: 2005 and Beyond:The BEAR is BACK ?

nizar said:
this may be so...
but look at dow and s&p500 for the last 2 years and compare to asx200 and all ords...

that said... the 4 most dangerous words in investing are: "Its different this time"
Click to expand...

You are very correct nizar. The magnitude in terms % gain is much higher for the ASX200, however the direction is the same as the Dow and S&P500.
In my opinion this is because during the 90's our market did not move with as much magnitude as the Dow. Subsequently the Dow and S&P500 entered a secular bear market in 2000, while the ASX200 had one more leg up after 2002 to complete it's bull campaign. If things do change to the downside then we may have a bearish alignment of most world markets.

Time will tell
 
Re: 2005 and Beyond:The BEAR is BACK ?

If the US and/or US dollar tanks then the Oz dollar is going to rise substantially against US$.

My concern is already we have a trade balance problem. Whilst our commodities boom is great, it's also contributing to a hi dollar, which in turn is not good for a whole lot of other industries. Eg farming (Iraq wheat aside) manufacturing, tourism.

I personally know a person who works in the film industry, and can't get work for love nor money atm, had to sell his house. Why, because it's cheaper to do it elsewhere, lot's now in NZ. This is not just movies, it's adds,TV, etc.

So my point/question, will a high Ozzie dollar be that good for us really, will the non US world adjust accordingly, can we progress from a country of quarries,farming and tourism to??????
 
Re: 2005 and Beyond:The BEAR is BACK ?

Pheonixrising,

I think the rally that the US dollar started early last year is far from finished. At least for another year anyway. Don't be surprised to tee the Aussie buckaroo back to 64-65c by this time next year.
 
Re: 2005 and Beyond:The BEAR is BACK ?

wavepicker said:
Pheonixrising,

I think the rally that the US dollar started early last year is far from finished. At least for another year anyway. Don't be surprised to tee the Aussie buckaroo back to 64-65c by this time next year.
Click to expand...

This is something that's not in my ideal model, but I agree.

Us treasuries are driving lower and our nongs intent on holding rates (as are the accursed pommy central bankers) = cash heading for the USD.
 
Re: 2005 and Beyond:The BEAR is BACK ?

I think the rally that the US dollar started early last year is far from finished. At least for another year anyway. Don't be surprised to tee the Aussie buckaroo back to 64-65c by this time next year.
Click to expand...

While this statement may well prove to be true, there were some strong fundamental reasons for the strength exhibited in the US$ that are, and may be absent in 2006.

1...Tax liabilities that were calculated at 0% for the repatriation of US Corporate foregin earnings expired December 31 2005.
Therefore the flood of foregin currency being converted to US$ will not be present.

2..The Yen *carry trade* door is closing, with the signalling from the BOJ that the negative real rates are coming to an end, and this arbitrage, is for all intents and purposes coming to an end. A 300 basis point spread might keep it alive a while longer, but, capital may well be starting to cycle out, and thus volatility will be on the increase.

3...Balance of Investment income ratio, may well turn negative.

4...Unilateral transfers are currently negative.

However, currencies are notoriously difficult to value, and really are the wildest of speculations in any timeframe.

jog on
d998
 
Re: 2005 and Beyond:The BEAR is BACK ?

Perhaps the bullish market in oil and mineral stocks are reaching choppy waters, and that includes much of Asia, excluding China. China has not really done that well in terms of share prices despite having chunks of publicity.
 
Re: 2005 and Beyond:The BEAR is BACK ?

wayneL said:
This is something that's not in my ideal model, but I agree.

Us treasuries are driving lower and our nongs intent on holding rates (as are the accursed pommy central bankers) = cash heading for the USD.
Click to expand...


To be honest with you Wayne, having worked in the manufacturing industry for 23 years I would welcome it. Manufacturers in Aussie have been doing it really tuff the last 3-4 years. Although the China factor will always be there, a lower dollar would hopefully improve the balance sheets a little.
The Aussie buck has been attempting to rally since early last years. For every rally it makes it just keeps getting beaten back down and is really struggling. If it breaks under 72c I beleive it will really pick up some downside momentum. The US Dollar Index on the weekly chart has a textbook inverted head and shoulders developing. IF this pattern materializes then we will get a fast move up between now and the end of the year.
I went short the aussie against the US Dollar @79.5c in Feb last year and I am still hanging onto that position, although it has been a very slow ratcheting decline.
 
Top